Production Enhancement Group announces modifications to certain warrants and related matters



    HOUSTON, TX, Dec. 4 /CNW/ - Production Enhancement Group, Inc. ("PEG" or
the "Company") (TSX: WIS) today announced that following negotiations with the
holders of its 6,666,667 shares of Series A 8% Preferred Stock ("Preferred
Shares") and the 5,000,000 associated warrants (having an exercise price of
CDN$1.24 per Common Share and an expiry date of March 5, 2012)(the
"Warrants"), for all accepting holders, the Company will amend the terms of
the Warrants to include a cashless exercise option and grant one (1)
additional Warrant for each ten (10) existing Warrants held. The Company will
also grant "piggyback" registration rights to these holders in the event the
Company were to file a registration statement under the US Securities Act of
1933 under certain circumstances.
    The cashless exercise option will allow a holder of a Warrant to elect to
exchange the Warrant for a number of Common Shares equal to the difference
between the value of the Common Shares at the time of exercise and the
original Warrant exercise price per Common Share (which remains at CDN$1.24
per Common Share). The additional 436,250 Warrants to be issued in this
transaction will have the exact same terms as the existing Warrants, including
the cashless exercise option. The registration rights would allow an electing
holder to register some or all of its Common Shares for sale in a registered
public offering filed by the Company under certain defined circumstances if
the Common Shares receivable upon conversion of the Preferred Shares or
receivable upon exercise of the Warrants were otherwise restricted from resale
under US securities regulations at such time. Under the Note Purchase
Agreement dated August 31, 2007 with the Company's senior lender, the Company
will be issuing an additional 43,187 warrants to such lender at an initial
exercise price of CDN$2.00 (the terms of which are described in detail in the
Company's press release of September 4, 2007).

    About Production Enhancement Group, Inc.

    Production Enhancement Group, Inc., a Houston-based energy services
company incorporated in Alberta, Canada, trades on the TSX under the symbol
WIS. PEG's wholly owned subsidiary, WISE(R) Well Intervention Services, Inc.,
has developed patented WISE multifunction coiled tubing technologies and
markets a full range of coiled tubing, pressure pumping, nitrogen, and
wireline services.

    WISE(R) is a registered trademark of Production Enhancement Group, Inc.

    Disclaimers

    The TSX does not accept responsibility for the adequacy or accuracy of
    this release.

    This release and PEG's website referenced in this release may contain
forward-looking statements, including expectations of future components of
cash flow and earnings. Investors are cautioned that assumptions used in the
preparation of such information may prove to be incorrect. Events or
circumstances may cause actual results to differ materially from those
predicted, a result of numerous known and unknown risks, uncertainties, and
other factors, many of which are beyond the control of PEG. These risks
include, but are not limited to, the risks associated with the oil and gas
industry, commodity prices, and exchange rate changes. Industry related risks
could include, but are not limited to, operational risks in exploration,
development, and production, delays or changes in plans, and health and safety
risks, including, without limitation, costs and expenses. The risks outlined
above should not be construed as exhaustive. Investors are cautioned not to
place undue reliance on any forward-looking information. PEG undertakes no
obligation to update or revise any forward-looking statements.

    %SEDAR: 00023366E




For further information:

For further information: visit www.productionenhancement.com or contact:
Douglas Parker, Chief Financial Officer, Production Enhancement Group, Inc.,
(281) 282-1851, dparker@wisewellintervention.com; Ken Wetherell, Investor
Relations, Bryan Mills Iradesso, (403) 503-0144 x224, kwetherell@bmir.com

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PRODUCTION ENHANCEMENT GROUP, INC.

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